Is WELL Health Stock a Buy in January 2023?

Given its discounted stock price and healthy growth prospects, I am bullish on WELL Health.

| More on:
healthcare pharma

Image source: Getty Images

WELL Health Technologies (TSX:WELL) has developed an innovative practitioner enablement platform that allows healthcare professionals to provide omnichannel patient services. It offers end-to-end practice management tools, including virtual care and digital patient engagement capabilities. The company witnessed solid growth during the pandemic, as people feared moving out.

However, with the easing of restrictions, investors fear a slowdown in its growth. Rising interest rates and recession fears have also caused the company’s stock price to decline by 42% in 2022. On the back of the steep correction, let’s assess whether one should start accumulating the stock or wait for some more time.

First, let’s look at its performances in the first three quarters of 2022.

Performance in the first three quarters of 2022

Despite the growing challenges, WELL Health has maintained its growth, with its revenue growing by 121% in the first nine months of 2022. The company’s solid organic growth and strategic acquisitions drove its top line. The company had 1.25 million omnichannel patient interactions in the third quarter, representing an annualized run rate of five million. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) also grew by 123% to $77.4 million. Meanwhile, its adjusted net earnings for the three quarters stood at $41.2 million.

The company generated around $47.5 million in cash from its operations in the first three quarters. The company had $52.4 million of cash and cash equivalents as of September 30. So, the company looks well equipped to fund its growth initiatives.

Now, let’s look at its growth prospects.

WELL Health’s growth prospects

Along with the convenience and accessibility the telehealthcare service offer, the development of innovative product offerings and growing internet penetration could drive the telehealth market in the coming years. Grand View Research projects the global telehealthcare market to grow at a CAGR (compound annual growth rate) of 24% from 2023 to 2030.

Amid the expanding addressable market, WELL Health is looking at expanding its footprint both in Canada and the United States. In August, the company acquired INLIV, specializing in consumer preventative health and integrated health services. The acquisition would strengthen its position in Calgary, Alberta.

Meanwhile, in September, it acquired Grand Canyon Anesthesia, which consists of over 100 anesthesia providers. Through this acquisition, the company is now operational in 18 states of the United States. Amid its healthy growth and solid third-quarter performance, the company’s management raised its 2022 revenue guidance by $15 million to $565 million. It expects its revenue run rate to reach $700 million by the end of next year. So, the company’s growth prospects look healthy.


The Federal Reserve of the United States has indicated that it would continue the monetary-tightening initiatives this year. So, interest rates could remain elevated in the near to medium term. So, I expect growth stocks, including WELL Health, to experience volatility in the near term. However, investors with over three years of an investment time frame can look to accumulate WELL Health to reap high returns in the long run. Amid the recent selloff, its valuation has declined to attractive levels, with its next 12-month price-to-earnings multiple standing at 11.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Tech Stocks

A shopper makes purchases from an online store.
Tech Stocks

Better Buy: Shopify Stock or Amazon?

Let's see which e-commerce stock is a better buy between Shopify and Amazon in 2023 and beyond.

Read more »

Businessman looking at a red arrow crashing through the floor
Tech Stocks

3 Growth Stocks Down Over 50% That Are Screaming Buys in January 2023

Given their healthy growth prospects and discounted stock prices, these three growth stocks could deliver superior returns over the next…

Read more »

New virtual money concept, Gold Bitcoins
Tech Stocks

These 2 Stocks Carry a Lot of Risk, But Their Upside is Huge

If you want windfall gains, you have to risk losing what you invest. These two stocks with disruptive technology could…

Read more »

Money growing in soil , Business success concept.
Tech Stocks

3 Growth Stocks Down More Than 50% to Buy for Outsized Gains in 2023

Beaten-down growth stocks such as Shopify provide investors the opportunity to derive exponential gains once market sentiment improves.

Read more »

Businessman holding AI cloud
Tech Stocks

ChatGPT Could Spell an “AI Revolution” for These Canadian Stocks

ChatGPT indicates a breakthrough in AI that could bolster stocks like Shopify (TSX:SHOP).

Read more »

Tech Stocks

Your Future Self Will Thank You for Buying Lightspeed Stock in 2023

Here’s why you may want to add LSPD stock to your portfolio in 2023 to hold it for the long…

Read more »

a person watches a downward arrow crash through the floor
Tech Stocks

Don’t Wait for a Market Crash: These 2 Top Stocks Are on Sale

Waiting for a market crash can take away the opportunity to buy early in the market rally while growth stocks…

Read more »

Coworkers standing near a wall
Tech Stocks

What’s Next for Magnet Forensics Stock After Hitting a 52-Week High Last Week?

While TSX tech stocks have lost around 30% last year, Magnet Forensics stock has soared 82%.

Read more »